Tag Archives: stakeholders

If we look at the world around us, we see systems and processes intertwining in service of humans, organizations and society. But what happens when those systems and processes break down? What happens when they no longer serve organizations, society or humans? What happens when particular interests overtake those systems, twist them, corrupt them or make them serve purposes far removed from the purpose for which they were created?

People reading this blog will know that I love innovation. I love finding connections between things and I think that systems and processes should be dynamic, flexible and transform with society and organizations. One of my favorite courses during my Masters was called “Persona y sociedad” and was an ethics courses for leaders of organizations. It was pure Peter Drucker. We explored the purpose of organizations and their role in society.

My post today is simply a reminder for current and future leaders of organizations to seek out opportunities for innovation through improvement or creation of processes and systems that serve a purpose; mediocrity or self-interests break those systems and end up serving only one person or at most a handful of particular interests. Without connection we are nothing. Even two strangers in an elevator are a temporary society – sharing a common purpose. Connection and purpose is what makes an organization relevant to stakeholders. Breaking this does nothing in the long run than break apart the organization.

Strategy and Business published a piece on doing business where governance is weak. They talk about how to succeed in markets that are prone to ethical and legal risks and focus their article on examples in Asia and the Middle East. It’s a fascinating read and one that illustrates principles for doing business that can be applied to our region of focus – Latin America.Embed from Getty Images
Here are six of those principles that are crucial to doing business in Latam:

1) align vision and values – this is about ensuring that all stakeholders – from board members to business unit leaders – share the company vision and their corporate values which includes ethical behaviour and how to deliver a product or service in the region. This is particularly important when managing country operations from headquarters outside the region (e.g. from the US or Europe).

2) understand the “way to play” at the local level – uniquely local ways to play exist and should be planned for. How relationships are built and how local talent is utilized is extremely important when contemplating success in Latin American markets.

3) identify key stakeholders – as mentioned in earlier blog posts, it’s important to identify who are the people that are decision makers and influencers in your industry and in the environment in which you operate.

4) build your brand – look at ways to engage your clients with your brand specific to the market. Understand your brand personality at a corporate level but tailor it to your market. You can minimize risk in Latam and emerging markets by having a strong brand that connects to users on many different levels.

5) stay vigilant – empower your local team but stay vigilant of what is going on. Tapping into resources like your country/Embassy trade representative or local expertise can help you stay in tune with local developments. Ensure that vision, values and company policies are not compromised.

6) adapt the governance model – this is the final suggestion from the writers of the article and it’s something that Hipona Consulting strongly recommends whether your company operates internationally or locally. It’s about making sure that members of your board represent the diversity and dynamic characteristics of your company, stakeholders and market. Local board members or committees can help connect the company’s interests to local interests and at times can prove very valuable to getting ideas – and company vision – across.

When I moved to Latin America over 10 years ago, I was told that my great grandfather (British) had travelled to Brazil from the UK over a hundred years before; it was my grandmother’s way of telling me that I was not the only one in my family to be attracted to South America and the great opportunities it held.

People and organizations are informed by the experiences of the people, companies and products that came before. We can’t help it. We walk with our ancestors every day in the conscious and subconscious choices we make and the languages we speak.

As a consultant, I have the opportunity to work with many different organizations and “walk with them” as they enter or expand their presence in Latin America.

One of the most important things I have learnt is to understand, at the outset, what ties the business to Latin America or the geographical markets they are entering. Even if the organization has no direct experience in the region, what is it in their DNA that makes them “Latin American” — able to be understood, respected, and sought out, by Latin Americans? I’m not talking about trying to transform companies into something they are not but rather looking for “relatable” stories that can be shared and enjoyed by future stakeholders.

I have seen companies with no local partners do very well — if and when they are able to tell a compelling story about their connection to Latin America or the country, city, community they are interacting with.

If you are interested in Latin America – or entering a new market – what stories do you have that tie you to that market?

Let me close this post on a personal note. Above, you will see a photo of my sister, Dr. Leah Clark and me in Pakistan in 2005. We are just outside Peshawar on the border with Afghanistan in the North West Frontier Province; where my father was born just before Partition in 1947. Below you will see a video by Google that has been shared widely in 2013.

When I talk about walking with our ancestors, I talk about finding out what makes us, them, the world “tick” so that we can create more valuable collaborative experiences.

I think one of the most misunderstood things about business in America is that people are either doing things for altruistic reasons or they are greedy and selfish, just after profit. That type of dichotomy portrays a false image of business.

Corporate Governance is more than just restoring or maintaining (public) confidence in a company; it’s about organizations making better decisions.

A few months ago I was in touch with a former colleague who I greatly admire – not only for his excellent management skills but also for the person that he is – kind, generous, honest and down to earth. We were talking about my consulting business and he asked me: “what is corporate governance”?

I realized that while many people (including very smart and skilled managers) might know that corporate governance relates to managing a corporation, they might not know exactly what it means. And it got me thinking that if more people know about corporate governance it might influence a shift towards creating more responsible and relevant organizations – especially those companies that we interact with as investors, employees, consumers, partners, etc.

Corporate governance to me, as a consultant, means helping boards (board of directors) make better decisions. It is a framework and a practice (within that framework) that ensures that corporate decisions benefit all stakeholders.

It is said that the introduction of the Sarbanes-Oxley Act in the US in 2002 ushered in a (renewed) interest in corporate governance because it was seen as a way to restore confidence in a “system”.

There is no doubt that corporate governance is a balancing act; organizations are good corporate citizens when they are not just concerned with profit but also short, medium and long term effects of their actions on the environment, community and their investors (including employees, suppliers, government etc.) It’s as much about PR as it is about internal controls, disclosure and performance management and compensation. For example, executive pay and benefits is a corporate governance issue if bonuses are tied to making short term decisions that could harm the organization. Such issues are kept in check by having an oversight committee or board of directors that examines executive actions, pay and risk.

So what does corporate governance mean to you? To me it means making sure that different voices are heard and that key decisions are not biased towards just making money or keeping a special interest group quiet. Corporate governance means that key decisions are made by taking into consideration different stakeholders in order to support the well-being of the entire organization.

Building a loyal following – a community, a tribe, engaged stakeholders – is vital to organizations world-wide. It means that you have a group of people that support your business, your products, your employees, your brand. They promote your products and services to their friends, they can tell you what your next product should be and they can notify you if you have made (or are about to make) a mistake. Building a community is organic but, I would argue, should be part of an organization’s strategy. Corporate strategy should ensure that it has the mechanisms in place to listen to customers, business partners, employees, communities and the people empowered to make the right decisions for your community and business.

With all the complexities of doing business in developing markets and, in my particular experience, Latin America, it seems that focusing on building a community is a “nice to have” and not a “must have”.

I would argue the opposite and here’s why…

Building a community reminds us why we are in business to begin with. It creates a sense of purpose that helps us (our employees, our management, our board of directors) strive to be our best. It drives us to succeed and to take good care of those around us and those who support us. It is what interaction is all about. And business is about interactions and about creating meaningful and value-driven interactions. If we don’t do this, why are we in business to begin with?